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High cost (fees are proportionally much more expensive), shady practices[1], accounts frozen by creditors. Poor people are making completely rational decisions
by gerbilly 8y ago
High cost (fees are proportionally much more expensive), shady practices[1], accounts frozen by creditors.
Poor people are making completely rational decisions when choosing not to trust banks, and it's patronizing to assume they simply don't know better.
[1] banks re-ordering transactions to maximise overdraft fees.
- mbostleman 8y agoSo there's an opportunity it sounds like. Why are no services stepping in to capture all those potential customers?
- gerbilly 8y agoOh there are, all those cheque cashing places for example, and they're under-regulated, so not too great either. Still paying a larger fee to cash a cheque sure beats having all your assets frozen entirely.
- mbostleman 8y agoCheck cashing isn't banking though. I mean why aren't there banks that can be sustainable without overdraft fees? I get the idea of a fee if they cover a charge in which funds aren't available. But can't a debit card simply decline if no funds are available - hence the bank never covers an unfunded charge and thus never charges overdraft fees? Are there not other ways to monetize banking for low cash flow individuals?
- ryandrake 8y agoIn addition to overdraft fees, banks charge monthly fees if you don’t maintain a high balance or regularly make direct deposits. This is how they “monetize” poor people. In reality the result is that these people go unbanked and simply keep cash.
- drivingmenuts 8y agoBanks don’t really exist to help people save money anymore. For the most part, they exist to extract fees from people who keep money there and from borrowers.
- deleted 8y ago[deleted]